Washington – Supreme Court Allow Tax Credit for Religious Tuition

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    Washington – The Supreme Court rejected a challenge Monday to an Arizona tax break that directs millions of dollars to private religious schools.

    The justices, in a 5-4 ruling, said that Arizona taxpayers who filed a lawsuit to block the tax break have no legal claim because they are not forced to contribute to the state program that sends money to the religious schools.

    Justice Anthony Kennedy wrote the court’s majority opinion, joined by the four conservative justices.

    Justice Elena Kagan dissented, along with three other liberal justices.

    For more than 13 years, Arizona has allowed residents to send up to $500 to a tuition scholarship organization that they would have otherwise paid the state in taxes on their incomes. The scholarship groups have received nearly $350 million, Kagan noted.

    There are also organizations for private secular schools, but the bulk of the money has been directed to religious schools.

    The major complaint about the law has been that state money has wound up in the coffers of religious schools.

    But Kennedy rejected the idea that the money at issue belongs to the state. “Contributions result from the decisions of private taxpayers regarding their own funds,” he said.

    The taxpayers who object to the program have an insufficient connection to the money involved to take their complaint to federal court, Kennedy said. The Obama administration argued aggressively for the outcome the court reached Monday.

    Kagan, in her first dissenting opinion since joining the court in August, said that her colleagues in the majority had provided governments a roadmap to protect decisions to send money to religious activity from court challenges.

    If the money comes from a traditional appropriation, someone might be able to sue over it, she said. But now the court has instructed governments to structure these programs as tax breaks to prevent lawsuits.

    “Appropriations and tax subsidies are readily interchangeable,” Kagan said. “What is a cash grant today can be a tax break tomorrow.”

    Monday’s ruling has no effect on more common voucher programs, which the court previously upheld. Arizona adopted its unusual arrangement because its state constitution prohibits direct aid to private schools, a lawyer for the state told the court during argument in November.

    The consolidated cases are Arizona Christian School Tuition Organization v. Winn, 09-987, and Garriott v. Winn, 09-991.

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    8 COMMENTS

    1. I surprisingly find myself in agreement with Kagan. This decision establishes a terrible precedent that would theoretically allow the New York legislature to pass a law allowing unlimited tax deductions for contributions to yeshivos and it might be viewed a legitimate. This would be taking otherwise taxable income that is desparately needed by New York and other states and converting it into direct grants to religious schools.

        • It is a CREDIT. And its really helpful. If you do your return and it turns out you owe AZ $100, you can simply send the money to an organziation that will use it for yeshiva tuition. The law even allows you to send the 2010 balance due now in 2011 and get credit for it against that 2010 balance due – so you can wipe out what you owe to the state (up to $500).

      • If you have a problem with they NY budget I have a solution for you. Close all public schools and everyone should pay their own tuition like us.

        FYI the Supreme Court doesn’t care about budgets they do care whether it is within the constitution or not.

    2. There is nothing more burden today on families than the payment for chinuch. It is B.Y. and the other day schools who suffer the most in recruiting qualified teachers and parents who work hard must fork out tuition. Torah im derech eretz is needed so those who work and pay tuition have not the burden of contributing for those who willfully don’t work

    3. $500/year sounds like peanuts. Tuition varies from $3,000/year to $5,000, PER CHILD! Large families are paying $30,000 to $50,000/year for tuition, so what’s $500! Moreover, if a family with 10 kids would send their kids to public school, it would cost the State a heck of lot more than $500!
      In the 2009 edition of Quality Counts, the EPE Research Center examined per-pupil expenditure levels for 50 states and the District of Columbia. Using data from the 2005-06 school year, the research center found that 23 states and the District of Columbia spent more than $10,000 per pupil, adjusted for regional cost differences. Vermont ranked first in the nation with $15,139 in spending for each student, followed by Wyoming ($14,126) and New Jersey ($13,238). At the other end of the spectrum, Utah spent only $5,964 per student adjusted for regional costs, the lowest amount in the nation. The national average for per-pupil expenditures was $9,963
      http://www.edweek.org/rc/articles/2009/01/21/sow0121.h27.html

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